HMRC has issued guidance on access to the creative industry tax relief. In addition to Film Tax Relief introduced in 2007 the UK has now introduced tax relief for animation and high end television with effect from 1 April 2013. Tax relief for video games development was also included in the 2013 budget announcements but is still awaiting approval from the EU under the State Aid provisions.

Companies may qualify for the creative industry tax relief if they are liable to corporation tax in the UK and are directly involved in the production and development of certain films, television programs, animation or video games. The products must however either satisfy a cultural test or qualify for the relief through a co-production treaty. The production must be classified as a British film, British program or British video game. The certification for this purpose is managed by the British Film Institute on behalf of the relevant government ministry. An interim certificate may be issued for an unfinished production or a final certificate for a completed production.

The guidance indicates that a film may qualify for Film Tax Relief if it is considered to be a British film, is intended for theatrical release, and at least 25% of the production costs relate to activities in the UK. The first day of principal photography must have taken place on or after 1 January 2007. Limited budget films, defined as those with core expenditure of GBP 20 million or less, are entitled to a tax deduction of 100% of enhanceable expenditure, this being the lower of UK expenditure or 80% of qualifying expenditure. Alternatively if a loss is surrendered the taxpayer is entitled to 25% of the loss up to the amount of the enhanceable expenditure. Films not classified as low budget are entitled to a tax deduction of 80% of enhanceable expenditure or, if a loss is surrendered, 20% of the loss up to the amount of the enhanceable expenditure. In the case of all films, whether low budget or not, the maximum tax deduction that can be claimed is the lower of the enhanceable expenditure for the accounting period or the amount of the loss.

The animation tax relief is available if the animation program passes the cultural test, is intended for broadcast, at least 51% of the total core expenditure is on animation and at least 25% of the total production costs relate to activities in the UK. Core expenditure is the total expenditure on pre-production, principal photography and post production while qualifying expenditure is the expenditure on goods and services consumed in the UK. The animation relief cannot be claimed if the program is an advertisement, a news or current affairs program, a quiz or game show, a contest, a broadcast of a live event or a training program.

High end television relief is available if the program passes the cultural test, is intended for broadcast, is a drama, comedy or documentary, at least 25% of the production costs relate to activities in the UK, the average qualifying production costs per hour are at least GBP 1 million and the slot length is greater than 30 minutes. This relief cannot be claimed for a promotional program, a quiz or panel show, a contest, a live event or a program for training purposes.

In the case of animation tax relief and high end television tax relief qualifying companies may claim either an additional tax deduction of 100% of enhanceable expenditure, this being the lesser of UK qualifying expenditure or 80% of total qualifying expenditure; or if a loss is surrendered, 25% of the loss up to the amount of enhanceable expenditure.

The video games tax relief is still awaiting EU state aid approval and no further guidance on the relief is given by HMRC at this stage.

The creative industry tax relief may be claimed in the corporate tax return if a certificate has been received from the BFI. If an interim certificate has been issued the company must obtain a final certificate when the production is completed to avoid having to repay any interim relief already received. The certificate must be submitted with the corporate tax return. A claim for creative industry tax relief may be made or amended within one year after the corporate tax return filing date of the company.